Verizon to Sell Data Centers to Equinix for $3.6 Billion
Verizon Communications will reap $3.6 billion when it sells the 24 data center sites it gained in its $1.3 billion acquisition of Terremark Worldwide five years ago to Equinix, a real estate investment trust. The deal will enable Verizon to raise cash after its expected $4.83 billion purchase of Yahoo! Inc. and the acquisition of wireless spectrum licenses.
For Verizon, the nation’s largest wireless carrier, the deal marks a retreat from the data-centers business five years after it bought Terremark Worldwide Inc. for $1.3 billion. As prospects faded and Verizon invested in more areas like mobile video and advertising, the company decided to put the data-centers unit up for sale about two years ago.
As the telecommunications industry matures, Verizon is shedding assets and turning the business in a new direction. Using go90, its video-streaming business, AOL’s web properties and the pending purchase of Yahoo! Inc., Verizon is entering a mobile video and advertising arena to challenge Google and Facebook Inc.
The acquisition of these assets will enable Equinix customers to further respond to a key market trend that is enabling their evolution from traditional businesses to “digital businesses” — the need to globally interconnect with people, locations, cloud services and data. Additionally, customers will have the opportunity to operate on an expanded global platform to process, store and distribute larger volumes of latency sensitive data and applications at the digital edge, closer to end-users and local markets.
The data centers to be acquired include approximately 900 customers, with a significant number of enterprise customers new to Equinix’s platform, and it adds approximately 2.4 million gross square feet. It will bring Equinix’s total global footprint to 175 data centers in 43 markets and approximately 17 million gross square feet across the Americas, Europe and Asia-Pacific markets.
The transaction is expected to close by mid-2017, subject to the satisfaction of customary closing conditions.